The European Aeronautic Defence and Space Company N.V. (EADS) was a global pan-European aerospace and defence corporation that operated 2000–2013, and was registered in the Netherlands. The group included Airbus which manufactured commercial aircraft, Airbus Military which manufactured tanker, transport and mission aircraft; Eurocopter, the world's largest helicopter supplier; Astrium, provided systems for aerial, land, naval and civilian security applications including Ariane, Galileo and Cassidian. Through Cassidian, EADS was a partner in the Eurofighter consortium as well as in the missile systems provider MBDA.

In June 1997, British Aerospace Defence Managing Director John Weston commented "Europe... is supporting three times the number of contractors on less than half the budget of the U.S."[4] European governments wished to see the merger of their defence manufacturers into a single entity, a European Aerospace and Defence Company.[5]

As early as 1995 the German aerospace and defence company DaimlerChrysler Aerospace (DASA) and its British counterpart British Aerospace were said to be eager to create a transnational aerospace and defence company.[6] The two companies envisaged including the French company Aérospatiale, the other major European aerospace company, but only after its privatisation.[7] The first stage of this integration was seen as the transformation of Airbus from a consortium of British Aerospace, DASA, Aérospatiale and Construcciones Aeronáuticas SA into an integrated company; in this aim BAe and DASA were united against the various objections of Aérospatiale.[8] As well as Airbus, British Aerospace and DASA were partners in the Panavia Tornado and Eurofighter Typhoon aircraft projects. Merger discussions began between British Aerospace and DASA in July 1998, just as French participation became more likely with the announcement that Aérospatiale was to merge with Matra and emerge with a diluted French government shareholding.[9] A merger was agreed between British Aerospace Chairman Richard Evans and DASA CEO Jürgen Schrempp in December 1998.[10] However when the British General Electric Company put its defence electronics business Marconi Electronic Systems (MES) up for sale on 22 December 1998, British Aerospace abandoned the DASA merger in favour of purchasing its British rival. The merger of British Aerospace and MES to form BAE Systems was announced on 19 January 1999 and completed on 30 November.[11][12] Evans stated in 2004 that his fear was that an American defence contractor would acquire MES and challenge both British Aerospace and DASA.[10]

DASA and the Spanish aircraft company Construcciones Aeronáuticas SA agreed to merge with the signature of a memorandum of understanding on 11 June 1999.[13] On 14 October 1999 DASA agreed to merge with Aérospatiale-Matra to create the European Aeronautic Defence and Space Company.[14] 10 July 2000 was "Day One" for the new company which became the world's second-largest aerospace company after Boeing and the second-largest European arms manufacturer after BAE Systems.[15]

In January 2001 Airbus Industrie was transformed from an inherently inefficient consortium structure to a formal joint stock company, with legal and tax procedures being finalised on 11 July.[16][17] Both EADS and BAE transferred ownership of their Airbus factories to the new Airbus SAS in return for 80 % and 20 % shares in the new company respectively. In April 2001 EADS agreed to merge its missile businesses with those of BAE Systems and Alenia Marconi Systems (BAE/Finmeccanica) to form MBDA. EADS took a 37.5 % share of the new company which was formally established in December 2001 and which thus became the world's second-largest missile manufacturer.[18]

On 16 June 2003 EADS acquired BAE's 25 % share in Astrium, the satellite and space system manufacturer, to become the sole owner. EADS paid £84 million, however due to the lossmaking status of the company BAE invested an equal amount for "restructuring".[19] It was subsequently renamed EADS Astrium. In November 2003, EADS announced that it was considering working with Japanese companies, and the Japanese METI, to develop a hypersonicairliner intended to be a larger, faster, and quieter, replacement for the Concorde, which was retired in October the same year.

Despite repeated suggestions as early as 2000 that BAE Systems wished to sell its 20 % share of Airbus, the possibility was consistently denied by the company.[20] However on 6 April 2006 BBC News reported that it was indeed to sell its stake, then "conservatively valued" at £2.4 billion.[21] Due to the slow pace of informal negotiations, BAE exercised its put option which saw investment bank Rothschild appointed to give an independent valuation. Six days after this process began, Airbus announced delays to the A380 with significant effects on the value of Airbus shares. On 2 June 2006 Rothschild valued BAE's share at £1.87 billion, well below BAE's, analysts' and even EADS' expectations.[22] The BAE board recommended that the company proceed with the sale and on 4 October 2006 shareholders voted in favour; the sale was completed on 13 October making EADS the sole shareholder of Airbus.[23]

In March 2007 EADS Defence and Security Systems division was awarded an eight year, £200m contract to provide the IT infrastructure for the FiReControl project in the UK.[24]

On 29 February 2008, the United States Air Force awarded a $35 billion contract for aerial refueling tankers (the KC-45) to Northrop Grumman, with EADS as a major subcontractor. The contract, one of the largest created by the Department of Defence, is initially valued at $35 billion but has the potential to grow to $100 billion.

Under the contract, Northrop Grumman and EADS would build a fleet of 179 planes, based on the existing Airbus 330, to provide in-air refueling to military aircraft, from fighter jets to cargo planes. While final assembly of the craft would take place at an Airbus plant near Mobile, Alabama, parts would come from suppliers across the globe.[25]

However, the award was protested by Boeing, the other bidder on the project, which was upheld by the GAO. In response to the new contest, on 8 March 2010, Northrop Grumman announced it was abandoning its bid for the new contract, with its CEO stating that the revised bid requirement favored Boeing.[26] On 20 April 2010, EADS announced it was re-entering the competition and intended to enter a bid with the KC-45.[27]

EADS reported a 763 million euros loss for 2009 as a result of a 1.8 billion euros charge on the troubled Airbus A400M project and a 240 million euros charge related to the A380.[28]

On 12 September 2012 it was reported[29] that BAE and EADS were in discussions regarding a possible merger. In the event of the merger, BAE shareholders would own 40 % and EADS 60 % of the new enlarged organisation.[30][31] A key French EADS shareholder Lagardere asked EADS to rethink the proposed merger plan as the conditions were unsatisfactory.[32] The bosses of BAE Systems and EADS issued a joint statement seeking political support for their proposed 35 billion euro (US$45 billion) merger from the British, French and German governments; and reiterated that the combination is borne out of opportunity, not necessity and the new company would be greater than the sum of its parts.[33][34][35] It was reported on 10 October 2012, that the merger between BAE Systems and EADS had been called off.[36]

On 31 July 2013, it was reported that EADS was to be renamed in 2014 to Airbus Group, adopting the name of its commercial aircraft-building subsidiary.[37]

Cassidian Systems – provides global security solutions such as command & control, lead system integration, TETRA and TETRAPOL communication systems for public safety, industry, transportation and defence. This line of business was the first one in the world to begin field tests with TETRA Enhanced Data Service (TEDS).[38]

EADS 3 Sigma – a Hellenic company focused in the design, development, production and services provision of airborne and surface target drone systems.

The Executive Committee is appointed by the board of directors, itself appointed by Daimler AG and SOGEADE. Both appoint four directors plus one independent director. As of July 2003 SEPI no longer nominates a board member, but a Spanish director is retained as the 11th member.[42] The board also appoints the company's chairmen, one from the Daimler nominated directors and from the SOGEADE nominated directors. In late 2004 Noël Forgeard (then Airbus CEO) was nominated by Lagardère as the next French CEO of EADS. Forgeard had suggested that this system should be abolished in favour of a single CEO in a move that DaimlerChrysler saw as an attempt to engineer a French dominated management team. Following protracted arguments, which caused embarrassment to EADS at the Paris Air Show, the appointment was confirmed by the EADS Board of Directors on 25 June 2005. At the same meeting the Board, in consultation with partner BAE Systems, named Gustav Humbert as President and CEO of Airbus.[citation needed]

In mid-2012, the general assembly of EADS appointed former Airbus CFO Harald Wilhelm as the new CFO of EADS, taking over for Hans Peter Ring, who will retire from the company. Arnaud Lagardère is going to be appointed as the new chairman and will succeed Bodo Uebber. Moreover, Airbus CEO Thomas Enders will possibly take over as EADS CEO and will be succeeded by current Airbus COO Fabrice Brégier.[43]

As of 30 June 2013 72.37 % of EADS stock is publicly traded on six European stock exchanges, while the remaining 26.77 % is owned by a "Contractual Partnership".[44] The latter is owned by SOGEPA (11.96 %), GZBV (10.69 %) and SEPI (4.12 %). SOGEPA is owned by the French State and Lagardère, while SEPI is a Spanish state holding company. France also owns 0.06 % of publicly traded stock.[45]

In October 2005 the British Ministry of Defence warned European politicians to stop, as it sees it, interfering in the corporate governance of EADS. The former UK Defence Procurement Minister Lord Drayson hinted that the UK government, a major customer for EADS, may withhold future contracts. "As a key customer, we see it as important for EADS to move in a direction that is free from political interference."[46]

On 4 April 2006, DaimlerChrysler announced its intention to reduce its shareholding from 30 % to 22.5 %. The company places a value of the stake at "approximately €2.0 billion."[47] Lagardère will reduce its holding by an identical amount. However, Caisse des Dépôts et Consignations, a unit of the French government, acquired 2.25 % of EADS. At issue as a result is the fact that the German and French shareholdings are now in imbalance.[48]

On 3 October 2006, shortly after EADS admitted further delays in the Airbus 380 programme would cost the company 4.8 billion euros in lost earnings in 2010, EADS shares, traded on the Paris arm of Euronext, were suspended after they surpassed the 10 % loss limit. Trading resumed later in the day with the one day loss holding at 7 %.

In 2007, Dubai Holding acquired 3.12 % of EADS stock, making the Dubai buy-out fund one of the largest institutional shareholders.[50]

In 2008, EADS had arms sales equivalent of $17.9 billion, which constituted 28 % of total revenue.[51]

In 2005 the Norwegian Government Pension Fund recommended the exclusion of several companies producing cluster bombs or components. EADS and its sister company EADS Finance BV were among them, arguing that EADS manufactures "key components for cluster bombs". The criticism was centered around TDA, a joint venture between EADS and Thales S.A. TDA produced the mortar ammunition PR Cargo, which can be considered cluster ammunition, however this definition has since been successfully battled by EADS. EADS and its subsidiaries are now regarded as fulfilling all the conditions of the Ottawa Treaty. According to the new point of view, no product of EADS or its subsidiaries falls into the category of antipersonnel mines as defined by the Ottawa Treaty ("landmines under the Ottawa Treaty"). In April 2006, the fund declared that the basis for excluding EADS from investments related to production of cluster munitions is no longer valid, however its shareholding of MBDA means the fund still excludes EADS due to its indirect involvement in nuclear weapons production.[52]

In August 2012 the UK Serious Fraud Office opened a criminal investigation into an EADS subsidiary, GPT Special Project Management Ltd, in connection with bribery allegations made by the subsidiary's former programme director, Ian Foxley. Foxley alleged that luxury cars were bought for senior Saudis, and that millions of pounds sterling was paid to mysterious Cayman Islands companies, and that this may have been done to secure a £2 billion contract to renew the Saudi Arabian National Guard's military telecommunications network.[53] Foxley's allegations were backed up by two other GPT employees.[54]

In 2003 Tony Yengeni, former chief whip of South Africa's African National Congress, was convicted of fraud relating to an arms deal with South Africa, in which EADS were major players,[55] worth around $5 billion. BBC reported that EADS had admitted that it had "rendered assistance" to some 30 senior officials to obtain luxury vehicles, including defence force chief General Siphiwe Nyanda.[56] In March 2003 the South African State completely withdrew the charges of bribery against the former head of EADS South Africa.[57] In September 2004 the Munich prosecutor's office issued a formal order on dismissal regarding the bribery charges against him due to his innocence in relation to the said car sales (file no. 572 Js 39830/01).

On 2 June 2006 co-CEO Noël Forgeard and Airbus CEO Gustav Humbert resigned following the controversy caused by the June 2006 announcement that deliveries of the A380 would be delayed by a further six months. Forgeard was one of a number of executives who exercised stock options in November 2005 and March 2006. He and 21 other executives are under investigation as to whether they knew about the delays in the Airbus A380 project which caused a 26 % fall in EADS shares when publicised.[58]

The French government's actions were also under investigation; The state-owned bank Caisse des Dépots et Consignations (CDC) bought part of Lagardère's 7.5 % stake in EADS in April 2006, allowing that latter to partially escape the June 2006 losses.[58]

^Nicoll, Alexander; Skapiner, Michael (1999-10-15). "Flying in formation: The merger of DaimlerChrysler Aerospace and Aérospatiale-Matra may pave the way for a larger European grouping or the first transatlantic defence tie-up, argue Alexander Nicoll and Michael Skapinker". Financial Times.